Were fingerprinting fees taxable when customers supplied blank cards to be imprinted for use in license applications?

Plain-English summary

Customers furnished blank cards and paid a business to imprint their fingerprints for use in license applications.

California treated producing, processing, printing, or imprinting consumer-furnished property for consideration as a sale. The customer's blank card and fingers supplied the materials used to create the desired imprinted fingerprint card for the first time.

The fingerprinting fees were therefore taxable retail gross receipts.

Citations and references

• California Revenue and Taxation Code sections 6006(b), 6007, 6012, 6015, and 6051 (as cited)
• California Sales and Use Tax Regulation 1526 (as cited)
• Sales and Use Tax Annotation 435.0300 (as cited)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/435-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/435-0830.pdf

Original ruling text

435.0830
STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

WILLIAM M. BENNETT
First District, Kentfield

1020 N STREET, SACRAMENTO, CALIFORNIA
(PO BOX 1799, SACRAMENTO, CALIFORNIA 95808)
(916) 445-8485

CONWAY H. COLLIS
Second District, Los Angeles
ERNEST J. DRONENBURG, JR
Third District, San Diego
RICHARD NEVINS
Fourth District, Pasadena
KENNETH CORY
Controller, Sacramento

March 12, 1985

DOUGLAS D. BELL
Executive Secretary

Dear X------------------,
Your letter of December 21, 1984, to Mr. Tokutomi of our Return Review Unit was referred to the undersigned for reply. You indicated that, for a fee, your business will imprint customers' fingerprints on cards furnished by such customers for use by them in applying for various licenses. You wondered whether sales tax was due with respect to the fees in question. Revenue and Taxation Code Section 6006, subdivision (b) defines "sale" to include: "(b) The producing, fabricating, processing, printing, or imprinting of tangible personal property for a consideration for consumers who furnish either directly or indirectly the materials used in the producing, fabricating, processing, printing, or imprinting" (see, also, Reg. 1526, copy enclosed). As you know, retailers such as yourself are required to report sales tax based upon their gross receipts from retail sales in California (Rev. & Tax. Code §§ 6007, 6012, 6015, 6051). Applying the foregoing provisions of the law to the facts in this matter leads us to conclude that the fingerprinting fees in question are subject to tax. Your business, in effect, utilizes customer-furnished materials, i.e., the blank card and the customer's fingers, to imprint the card, thereby bringing the transaction within the purview of section 6006, subdivision (b). Essentially, your activities result in the creation or production for the first time of the desired article, i.e., an imprinted fingerprint card. In the past, we have considered charges for similar activities to be subject to tax (see, e.g., BTLG anno. 435.0300). Very truly yours, E. Leslie Sorensen, Jr. Tax Counsel ELS:rar Enclosure